Nov. 26 (Bloomberg) -- Bancolombia SA, the nation’s largest
bank, fell the most in four months after saying it would sell
shares to raise capital after paying $2.5 billion for two
Central American lenders last month.

The Medellin-based bank’s shares dropped 1.7 percent to
24,320 pesos at 11:41 a.m. in Bogota after earlier sliding 3
percent, the biggest intraday decline since July 10. It was the
worst performer after Petrominerales Ltd. on the benchmark
Colcap index, which declined 0.5 percent.

Bancolombia’s board instructed management to structure a
public offering of 110 million shares in Colombia, worth 2.7
trillion pesos ($1.4 billion) at yesterday’s closing price,
according to a U.S. regulatory filing. The transaction requires
advance approval from Colombia’s financial regulator, according
to the filing, which didn’t provide an estimated time frame.

“I was a bit surprised by the timing, which was earlier
than I was thinking, and by the amount, since I thought they
would need less,” Juan C. Dominguez, an analyst at Credicorp
Capital’s Colombia unit, said in a telephone interview.

The bank is seeking sufficient capital to maintain growth,
Martha Elena Acosta, a Bancolombia spokeswoman, said in a
telephone interview yesterday.

Regulatory approval could take six to eight weeks, Acosta
said today in an e-mailed response to questions.

Bancolombia closed its $2.2 billion deal for HSBC Holdings
Plc’s Panama unit in October after completing the $217 million
purchase of a stake in Guatemala’s Grupo Agromercantil Holding
earlier in the month.